MIRR Calculator

Calculate the Modified Internal Rate of Return (MIRR) using finance and reinvestment rates to assess true investment profitability. Works for fixed or varying cash flows.

By CalcMastery Team

MIRR – Modified IRR Calculator

Compute Modified Internal Rate of Return using finance (cost of capital) and reinvestment rates for fixed or irregular cash flows.

Fixed Cash FlowDifferent Cash Flow

Frequency of periods used to annualize MIRR.

$

Outflow at time 0 (enter as a positive number; treated as negative cash flow).

Total number of periods in the analysis horizon.

$
Period
Amount

Enter inflows (+) and outflows (−) with their period index (1 = first period). Initial investment is handled separately at period 0.

%

Cost of capital for negative cash flows. Used to discount outflows back to present value.

%

Rate at which positive cash flows are assumed to be reinvested until the end of the project horizon.

Results

  • MIRR (per period)— %
  • MIRR (annualized)— %
  • Project Length (periods)—
  • PV of Negative Cash Flows$
  • FV of Positive Cash Flows (at end)$
  • Initial Investment$
  • Total Inflows (sum)$

Enter your inputs above to calculate the results.

The MIRR Calculator computes the Modified Internal Rate of Return based on investment cash flows, finance rate, and reinvestment rate. It refines the traditional IRR by considering the cost of capital for outflows and the reinvestment rate for inflows, giving a more realistic view of project profitability.

Introduction

This calculator supports two modes: Fixed Cash Flow (same cash inflow per period) and Different Cash Flow (varying inflows by period). You can set Initial Investment, Number of Periods, Cash Flow per Period or detailed Cash Flow entries, along with Finance Rate and Reinvestment Rate per period.

The MIRR is computed as:

MIRR = (FV of Positive Cash Flows / PV of Negative Cash Flows)1 / n − 1

where n = number of periods.

How to Use the MIRR Calculator

Follow these steps to find the true rate of return for your investment project:

Select Mode

Choose Fixed Cash Flow if the same inflow repeats each period, or Different Cash Flow for custom inflows by period.

Enter Periodicity

Pick how often cash flows occur (e.g., yearly, quarterly). This sets the time base for the MIRR.

Input Initial Investment

Enter the total upfront cost as a positive amount.

Set Cash Flows

    • In Fixed Cash Flow mode, fill Cash Flow per Period and Number of Periods.

- In Different Cash Flow mode, list each Period and Amount separately.

Enter Finance Rate

The cost of borrowing or opportunity cost for negative cash flows.

Enter Reinvestment Rate

The rate at which positive cash flows are assumed to grow.

Review Results

The calculator automatically shows MIRR (per period), MIRR (annualized), and supporting metrics such as PV of Negative Cash Flows and FV of Positive Cash Flows.

Frequently Asked Questions

What does MIRR stand for?

MIRR stands for Modified Internal Rate of Return. It refines the traditional IRR by assuming reinvestment of positive cash flows at a specified reinvestment rate and financing of negative cash flows at a finance rate.

How is MIRR different from IRR?

IRR assumes reinvestment at the project’s own rate of return, which can be unrealistic. MIRR instead uses user-defined finance and reinvestment rates, giving a more stable and realistic measure of profitability.

What inputs are needed for the MIRR Calculator?

You must enter the initial investment (a negative cash flow), a series of positive cash flows (either fixed or varying), the number of periods, the finance rate, and the reinvestment rate.

When should I use the Fixed Cash Flow vs Different Cash Flow mode?

Use Fixed Cash Flow when each period produces the same inflow. Choose Different Cash Flow when each period’s inflow varies, such as for uneven project returns.

What does a higher MIRR indicate?

A higher MIRR means better project performance relative to cost of capital and reinvestment opportunities, making it a key metric for comparing investment alternatives.

How do negative cash flows affect MIRR?

Negative cash flows are discounted to present value using the finance rate, increasing the denominator in the MIRR formula and reducing the resulting return.

Can MIRR be negative?

Yes. A negative MIRR indicates that the project’s adjusted returns are insufficient to recover the initial investment when considering financing and reinvestment assumptions.

The Modified Internal Rate of Return (MIRR) is a financial metric that addresses limitations of the traditional IRR by separating the rates for financing (outflows) and reinvestment (inflows). It provides a more realistic assessment of an investment’s profitability.

Formula

For a project with $n$ periods:

MIRR = (FVinflows / (-PVoutflows))1 / n − 1

Where:

  • PV outflows = Present value of negative cash flows discounted at the finance rate rf
  • FV inflows = Future value of positive cash flows compounded at the reinvestment rate rr

Steps

    1. Identify all cash flows CFt for each period t.
    2. Compute PVoutflows = sumCFt < 0 CFt / (1 + rf)t
    3. Compute FVinflows = sumCFt > 0 CFt × (1 + rr)n-t
    4. Apply the MIRR formula to derive the rate per period.
    5. For annualization (if periods are not yearly):
MIRRannualized = (1 + MIRRper period)periods per year − 1

Modes Supported

  • Fixed Cash Flow Mode: Uses uniform inflows per period.
  • Different Cash Flow Mode: Allows distinct inflows by period index.

Example

Given:

  • Initial Investment = $10,000
  • Cash Flow per Period = $2,500
  • Periods = 5
  • Finance Rate = 8%
  • Reinvestment Rate = 10%

Then:

PVoutflows = 10,000
FVinflows = 2,500 × ((1.10)5 − 1) / 0.10 = 15,262.75
MIRR = (15,262.75 / 10,000)1 / 5 − 1 = 8.82%

Assumptions

    • Cash flows occur at period end.
    • Finance and reinvestment rates remain constant.
    • No interim withdrawals or additional investments.
    • Not defined for zero or negative PV outflows.

Rounding

    • MIRR: 2 decimals
    • Currency: USD, 2 decimals

Edge Cases

  • Division by zero if no negative cash flow.
  • MIRR not defined for all-negative or all-positive cash flows.
  • Extremely high or low reinvestment rates can skew results.

Sources & Methodology